[Pages S1510-S1511]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                              S.J. Res. 28

  Mr. BLUMENTHAL. Mr. President, we are considering today S.J. Res. 28. 
That sounds highly technical, complex, and difficult to understand, and 
some may consider it so; but, in fact, it would have the very simple, 
straightforward effect of undoing a rule that is vital to protecting 
consumers. It would undo the Consumer Financial Protection Bureau's 
larger participant rule under the Congressional Review Act.
  I think most people, by now, know about the CFPB, the Consumer 
Financial Protection Bureau, which is, in effect, the top cop on the 
beat of reviewing Big Banks' activities to prevent consumers from being 
cheated, scammed, and defrauded. It is under attack by the Trump 
administration and, of all people--surprise--Elon Musk. Elon Musk's 
attack on this rule is not coincidental, as I will explain in just a 
couple of minutes. To add insult to injury, our Republican colleagues 
are forcing a vote on this CRA to overturn the CFPB's larger 
participant rule, which protects consumers as big tech companies rush 
into offering financial services.
  The big tech companies are getting into this business. Why? Because 
that is where the money is. This rulemaking allows the CFPB to 
supervise larger, nonbank companies that offer digital payment 
services, including peer-to-peer apps like Venmo or Cash App.
  Again, it sounds complicated; but, really, at its core, it is very 
simple. It means that the CFPB can protect consumers on Venmo and other 
apps in the same way they do with banks. That is what the rule enables 
them to do. You are not a big bank, but consumers can still be 
protected if you fail in your duty to them. It is a commonsense measure 
to deter misconduct and protect consumers. If this CRA attempt is 
successful, it will undermine the CFPB's efforts to crack down on peer-
to-peer fraud--apps which are misused or abused--and that fraud has 
surged in recent years.
  To make it real, let me just tell you about my experience as chair of 
the Senate Permanent Subcommittee on Investigations. I opened an 
inquiry into the handling of scams and fraud on Zelle. Our 
investigation found that the level of reimbursement for fraud has 
dropped precipitously in the last 5 years, from 62 percent to 38 
percent. What does that mean? Reimbursement for fraud has diminished 
hugely in the last 5 years, even though the rate of fraud has, 
probably, increased. In other words, peer-to-peer companies like Zelle 
are not returning money they are supposed to be giving back to people 
who are scammed on their app.
  Not only are consumers who have already been harmed by fraud and 
scams on peer-to-peer payment platforms not seeing relief by rolling 
back the larger participant rule, the Trump administration is 
effectively telling tech companies that want to offer payments: Do 
whatever you want. The floor is yours. No one will be watching you. No 
one will be enforcing reimbursement if you permit fraud on your 
platform.
  Now, just so everyone understands, requiring reimbursements provides 
a pretty strong incentive for any platform to police and prevent fraud. 
That is the reason reimbursements are important in a more general 
sense. Obviously, they are important to somebody who has been defrauded 
in that they want their money back, but the requirement that the 
platform provide reimbursements is a very strong and persuasive 
deterrent to lax and lackadaisical oversight by the platform itself. 
These platforms are speedy; they are quick; they are easy. It becomes 
speedy, quick, and easy to lose your money, and most of the payments 
are irreversible.
  People watching at home may be wondering why Republicans are spending 
their time trying to roll back a commonsense rule that will empower the 
CFPB to protect everyday consumers from scams.
  Well, like I was saying a little bit earlier, you don't have to look 
very far for the answer. As with most of the havoc wreaked by this 
administration in the last month, follow the money. It leads to Elon 
Musk. In January, Musk announced that he will be partnering with Visa 
to launch xMoney--a new venture that would provide X users with access 
to a mobile wallet and the ability to make peer-to-peer payments. So 
this new service, provided by X, would be, in fact, potentially subject 
to this rule and requirements for reimbursement that, of course, would 
check the laxity of oversight and force the kind of responsibility--it 
is really a responsibility to consumers--that these peer-to-peer 
platforms owe them morally. It ought to be a legal obligation, not just 
a moral one.
  The value of X has dropped dramatically--another surprise since Musk 
purchased it 2 years ago with Fidelity--estimating the value has 
declined by nearly 80 percent. Now, seemingly, Musk is desperate to 
turn a profit on his investment in X. The CFPB, which Musk has attacked 
and now the administration is moving to shut down, will be one of 
xMoney's regulators--in fact, its key regulator. Given the spike in 
scams, bots, and hate speech on X since Musk purchased the site, one 
can only imagine how prevalent scams are likely to be on xMoney, 
especially with a diminished--or no--CFPB to regulate it.
  I know ``regulation'' is becoming a dirty word, but think of it as 
protecting consumers, preventing fraud that may be irreparable when it 
occurs because consumers can't get their money back.
  The larger participant rule, if it is not repealed, would authorize 
the CFPB to examine xMoney's books and records and look for illegal 
practices. The CFPB would be at X's door, asking for those records, 
overseeing their transactions, protecting consumers. No wonder Elon 
Musk doesn't like it. He is averse to transparency and disclosure as a 
matter of principle, and that is why he is trying to make 
``regulation'' a dirty word.
  Hence, while Elon Musk continues to ride roughshod over the CFPB, 
Senate Republicans are doing his bidding today. They are attempting to 
overturn the rule he doesn't like because it would require more 
disclosure, more transparency, more responsibility legally as well as 
morally from xMoney, his company.
  When you come right down to it, it seems more simple than even I 
thought at the beginning of my talk here today. The CFPB, through 
rulemaking like the larger participant rule, protects consumers from 
fraud, scams, and financial abuse. Every attack on the CFPB--and we 
have seen a lot of them, including this one, the CRA--is an attack on 
commonsense consumer protection. It is designed to benefit the wealthy 
and well-connected, like Elon Musk, at the expense of everyday 
Americans. It takes away a protection to benefit Musk--already a 
multibillionaire--and xMoney and X, and it is at the expense of us, the 
everyday Americans.
  I urge my colleagues today to vote against this attack on the CFPB 
and to vote no on S.J. Res. 28.
  Again, it may seem complicated. Before I came to the floor today, I 
was meeting with some media executives--people extremely knowledgeable 
and financially astute--involved in major American corporations. I told 
them I was coming to the floor of the U.S. Senate to talk about the 
CFPB and the larger participant rule, and they looked at me as though I 
were from outer space.
  Americans are unaware, and they will be unaware until xMoney starts 
hosting scams, frauds, bots, and they are cheated or defrauded. Then 
they

[[Page S1511]]

will wonder: Why is there no protection? ``Why aren't you doing 
something?'' they will say to us in the U.S. Senate. I hope they will 
hold accountable my Republican colleagues--anyone who supports this 
CRA--because it will dramatically reduce the enforcement power of the 
CFPB and anyone else to help protect consumers from those frauds and 
losses of money, which they need now more than ever.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Mississippi.